Life insurance can help ensure that dependents have the resources they need to replace their income if they die. But how is coverage purchased? What can you do to get the best possible rate? Understanding the process of obtaining life insurance can help you get the coverage you need at the price you can afford.
Determine your life insurance coverage needs
There are two main categories of life insurance: permanent life insurance, which provides coverage for you throughout your life, and term life insurance, which provides coverage for a specific period of time. Your local insurance agent can help you understand more about your options.
Once you have decided to purchase life insurance, you will need to determine the amount of your coverage by looking at how much beneficiaries will need after your death, and how much you have already covered through personal assets or group insurance (such as the policy provided by your employer) .
Medical questions on how to apply for life insurance
You will need to apply for life insurance. The application will request basic information such as your name, address and employer. You will also request the following personal information:
- Height
- Weight
- date of birth
- Lifestyle habits (i.e. smoking, drinking, and exercising)
- Financial information, including your annual income and net worth.
While it may be tempting to lie about your weight or other health problems, it is important to tell the truth. If the company detects that you have lied about a health or lifestyle condition, it can increase your premiums, cancel your policy, and / or reject the death compensation beneficiary's claim.
Some insurance companies will accept your answers to health-related questions, such as medications you are taking or any surgery you have undergone, on the app. Life without proof, like guaranteed life insurance and simplified life insurance, is generally more expensive and has a lower face value than insurance that requires a medical exam.
Medical proof of life insurance
Most companies and policies require a personal medical exam. The life insurance agent will arrange for a medical assistant (licensed healthcare professional from the insurance company) to find you at your home, office, or clinic chosen by the insurance company.
During the test, the medical assistant can:
- Record your medical history (including medical conditions, surgeries, and any prescription medications).
- Ask about your immediate family's medical history.
- Check your blood pressure.
- Listen to your heartbeat.
- Check your height and weight.
- Draw a blood sample.
- Obtain a urine sample
- Ask about lifestyle habits that can affect your health (such as exercise, smoking, drinking, recreational drug use, frequent travel, and high-risk hobbies).
You may need to take additional tests depending on your age, the type of policy you want, and the amount of coverage you are applying for. Additional tests may include an EKG, chest X-ray, and / or a treadmill test.
After that, an insurance company's office will review your request and the results of the medical exam. They may request medical records from their physician to obtain more information about any medical condition they may have and any treatment received. This information helps them determine the risks to the business financially and how much it costs to cover.
Once your request is reviewed and reviewed, the company will accept or deny your request for coverage. This process can take days or weeks, depending on whether you have made a complete request and the time required to receive the laboratory results, if the company requests information from your doctor, etc.
Ways to lower your life insurance premium
While you can't do anything about two of the three main factors that affect your cousin (age and family medical history), there are steps you can take regarding the third: lifestyle. You can reduce your premium if:
- Give up smoking. As a non-smoker, you are likely to live longer, which means the life insurance company will have more years to collect your paid premiums before having to pay the policy when you die.
- Weightloss. Weight loss often results in lower cholesterol levels, lower blood pressure, and a lower risk of developing chronic diseases like diabetes. All of these improvements in your health can make you a better insurance risk.
- Reduce or consume the amount of alcohol you consume. Drinking may pose a potential health risk. Life insurance companies will verify your application, driving record, and medical exam to get a picture of your drinking habits. Drinking less alcohol, or stopping it altogether, makes it less dangerous for the company, and is therefore likely to get less of a reward.
- Improve your driving. Insurance companies can increase your insurance premiums if you have multiple moving violations.
Other non-lifestyle methods to reduce your premium include:
- Change from permanent life insurance to life insurance. Depending on your age and how long you expect to need life insurance coverage, you may want to consider switching to a rank policy. Please check the cancellation policy of the current coverage before making the change.
- Change insurance company. You may be able to get similar or better coverage for less money.
- Eliminate the riders. Passengers are optional policy provisions that pay additional money to you or your beneficiaries. The types of riders include:
- Pass the accidental death benefit - pay beneficiaries if their death was the result of an accident
- Child life and life contest: paid if a child dies covered by the life insurance policy
- Quit Premium Competitor - Pay Your Premium If You Are Permanently Disabled
- Life Benefit Rider - Prepays a portion of the death compensation payment if you are diagnosed with a terminal illness or if you need long-term care or nursing home services
- Payment Contestant: Waives Quotas If Dies or becomes Disabled Before Dependent Child Reaches Age
- Look for "no load" or "low load" policies. These documents are usually less expensive because insurance agents charge a fixed fee rather than a substantial commission.
- Ask about payment discounts. You can get a discount to pay your full bill annually instead of paying monthly. Insurance companies may also grant a discount to automatically withdraw your payment from your checking account.
- Check your credit report. Insurance companies can review your credit report when determining your insurance premium. Paying your bills on time, stated in your report, ensures that the company will likely pay your premium on time and in full.
- Choose a company that has experience covering people with your condition. If you have a medical condition, the mediator can help you find a company that is likely to work with you and can offer you a better rate.
- Review your medical information office file. Insurance companies share information about medical conditions for applicants through the Office of Medical Information (MIB). Request a free copy of your file from the MIB website and review it; Incorrect information can negatively affect your premium.
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